Reverse Modernization Analysis: Exploring a History of How Vested Interests Were Politically Marginalized before Modern Economic Development

Makio Yamada
Publication type
Working Paper

This working paper experiments with what the author calls “reverse modernization analysis,” that is, revisiting the historical West from the perspective of today’s developing countries instead of the teleological approach of modernization theory (just like engineers do reverse engineering). We know today that democracy and authoritarianism alike have witnessed both positive and negative cases of economic development. Therefore, instead of questioning the economic consequence of polity, the paper commences an exploration of an alternative historiography of development focused on how underproductive vested interests were politically marginalized—a political settlement necessary for modern economic development. It briefly examines five major country cases in the period before the 20th century: Britain, France, Germany, Italy, and Japan. The preliminary empirical analysis shows that the decline of conservative elites, which is divided into three patterns—revolution, ruler’s alliance, and parliamentary politics—was caused by sui generis courses of events rather than by common systematic factors. This finding may be frustrating, but implies that political games are like sports games: even if a team does its best, victory is not guaranteed when the opponent plays well. The team still needs to stay ready to take advantage of windows of opportunity when they open.

modern economic development,
political settlement,
vested interest